Money Matters: Tips for getting out of debt

June 30, 2017 01:30

Sponsored by NEFE

About a third of American households carry credit card debt from month to month. If you're able to make more than the minimum payment and hold off on additional spending until you can pay down the balance, you can stay in good shape financially. But if it becomes difficult to make payments, it may be time to take more significant steps to get out of debt and avoid more serious consequences, such as fines, repossessions or even bankruptcy. Putting yourself on a budget and sticking to your plan gives the best chance of success.

As Bankrate.com explains, an important first step is to stop overspending and set a fixed budget. They suggest paying off the cards or loans with the highest interest rates first, making minimum payments on the rest until the higher-rate debt is retired. An alternative strategy is to pay off smaller balances first, to gain a feeling of success each time an account reaches a zero balance. And it can also be worth talking with creditors about working out a payment plan. Many are willing to settle for less than the full amount if they are more confident about your ability to pay off the debt.

To help your viewers/readers/listeners understand more about how debt can weigh down your personal financial picture, talk with credit counselors in your area, who can give suggestions about setting up a monthly budget and setting realistic targets to pay off debts. They can also talk about solutions such as debt consolidation and about how they negotiate with creditors to develop payment plans.

Jill Schlesinger of CBS Radio News entered the 2016 NEFE/RTDNA awards contest with her ongoing series Jill On Money, which covers a wide variety of personal finance issues and helps answer callers questions about money.